$9,490,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BONDS, SERIES 2009A (HARRISON COUNTY, MISSISSIPPI HIGHWAY CONSTRUCTION PROJECT)

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1 TWO NEW ISSUES - BOOK-ENTRY ONLY OFFICIAL STATEMENT RATINGS: Moody s: A1 S&P: AA- (See RATINGS herein) In the opinion of Butler, Snow, O Mara, Stevens & Cannada, PLLC, Jackson, Mississippi, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series 2009A Bonds (as hereinafter defined) is excludable from gross income for federal income tax purposes pursuant to Section 103 of the Code (as hereinafter defined), is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and is not taken into account in determining adjusted current earnings for purposes of computing the federal alternative minimum tax imposed on certain corporations. Interest on the Series 2009B Bonds (as hereinafter defined) is included in gross income for federal tax purposes. In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series 2009 Bonds (as hereinafter defined) is exempt from income taxation in the State of Mississippi. See TAX MATTERS herein and APPENDIX G - FORM OF BOND COUNSEL OPINION. Dated: Date of Delivery $9,490,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BONDS, SERIES 2009A (HARRISON COUNTY, MISSISSIPPI HIGHWAY CONSTRUCTION PROJECT) and $63,295,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BUILD AMERICA BONDS, SERIES 2009B (HARRISON COUNTY, MISSISSIPPI HIGHWAY CONSTRUCTION PROJECT DIRECT PAYMENT FEDERALLY TAXABLE) Due: As Shown on the Inside Front Cover This Official Statement has been prepared to provide information relating to the issuance by the Mississippi Development Bank (the Bank ) of its $9,490,000 Special Obligation Bonds, Series 2009A (Harrison County, Mississippi Highway Construction Project) (the Series 2009A Bonds ) and its $63,295,000 Special Obligation Build America Bonds, Series 2009B (Harrison County, Mississippi Highway Construction Project Direct Payment Federally Taxable) (the Series 2009B Bonds, and together with the Series 2009A Bonds, the Series 2009 Bonds ). Hancock Bank, Gulfport Mississippi, will serve as the trustee (the Trustee ) for the Series 2009 Bonds pursuant to an Indenture of Trust, dated August 26, 2009 (the Indenture ), between the Bank and the Trustee. The Series 2009 Bonds will be dated the date of delivery thereof, and will bear interest from that date to the dates of their respective maturities in the amounts and at the rates set forth on the inside cover of this Official Statement. The Series 2009 Bonds are issuable only as fully registered bonds and, when issued, will be registered in the name of CEDE & CO., as nominee for The Depository Trust Company, New York, New York ( DTC ). Purchases of beneficial interests in the Series 2009 Bonds will be made in book-entry-only form, in the denomination of $5,000 or any integral multiple thereof with respect to the Series 2009A Bonds and in the denomination of $1,000 or any integral multiple thereof with respect to the Series 2009B Bonds. Purchasers of beneficial interests in the Series 2009 Bonds will not receive physical delivery of certificates representing their interests in the Series 2009 Bonds. Interest on the Series 2009 Bonds is payable semiannually on January 1 and July 1 of each year, commencing January 1, So long as DTC or its nominee is the registered owner of the Series 2009 Bonds, interest, together with the principal of and redemption premium, if any, on the Series 2009 Bonds will be paid directly to DTC by the Trustee, all as defined and more fully described under the caption DESCRIPTION OF THE SERIES 2009 BONDS - Book-Entry-Only System. The Series 2009 Bonds are issued by the Bank for the principal purpose of providing a loan to Harrison County, Mississippi (the County ) to finance the Project (as hereinafter defined), which includes the Highway Project (as hereinafter defined), paying costs of issuance of the Series 2009 Bonds, providing for the payment of the Termination Payment (as hereinafter defined) or a portion thereof and funding a debt service reserve fund for the Series 2009 Bonds, all as more fully described in this Official Statement. The Series 2009 Bonds are subject to extraordinary and mandatory redemption prior to maturity as more fully described in this Official Statement under the captions DESCRIPTION OF THE SERIES 2009 BONDS Redemption of the Series 2009A Bonds and DESCRIPTION OF THE SERIES 2009 BONDS Redemption of the Series 2009B Bonds. The Bank has elected to designate the Series 2009B Bonds as Build America Bonds for purposes of the American Recovery and Reinvestment Act of 2009 and to receive or direct the payment of a cash subsidy (the Subsidy Payments ) from the United States Treasury equal to 35% of the interest payable on the Series 2009B Bonds. See DESCRIPTION OF SERIES 2009 BONDS Designation of Series 2009B Bonds as Build America Bonds. The Subsidy Payments are not included in the Trust Estate (as hereinafter defined) and do not provide security for the Series 2009B Bonds. The Series 2009 Bonds are payable solely out of the revenues and funds of the Bank pledged therefor under the Indenture, as more fully described herein, which include Project Revenues (as hereinafter defined) received by the County from the Mississippi Transportation Commission (the Commission ) on behalf of the Mississippi Department of Transportation ( MDOT ) pursuant to the Amended and Restated Interlocal Cooperative Agreement between the County and the Commission dated October 19, 2005 (the Cooperative Agreement ), which revenues are assigned by the County to the Trustee pursuant to the Assignment Agreement (as hereinafter defined). Project Revenues (as hereinafter defined) of MDOT are subject to annual appropriation by the Mississippi Legislature and the Congress of the United States of America. See SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS The Memorandum of Understanding, APPENDIX B - INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION - Federal Aid Highway Program and APPENDIX I The Cooperative Agreement. The Series 2009 Bonds are issued on a parity with the Mississippi Development Bank Special Obligation Bonds, Series 2005 (Harrison County, Mississippi Highway Construction Project), dated October 19, 2005 (the Series 2005 Bonds ), and Additional Bonds (as hereinafter defined), if any, as to Project Revenues and Intercept Moneys (as hereinafter defined). The Series 2009 Bonds do not constitute a debt, liability or loan of the credit of the State of Mississippi (the State ) or any political subdivision thereof under the Constitution and laws of the State, or a pledge of the faith, credit and taxing power of the State or any political subdivision thereof, including the County. The sources of payment of, and security for, the Series 2009 Bonds are more fully described herein. The Bank has no taxing power. THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. PROSPECTIVE INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. The Series 2009 Bonds are offered subject to the final approval of the legality thereof by Butler, Snow, O Mara, Stevens & Cannada, PLLC, Jackson, Mississippi, Bond Counsel. Certain legal matters will be passed upon for the Bank by its counsel, Balch & Bingham LLP, Jackson, Mississippi, for the County by its counsel, Holleman & Associates, Gulfport, Mississippi, for MDOT and the Commission by the Special Assistant Attorney General of Mississippi assigned to MDOT, and for the Original Purchasers by Baker Donelson Bearman, Caldwell & Berkowitz, PC, Jackson, Mississippi. Government Consultants, Inc., Jackson, Mississippi, will serve as the Financial Advisor to the Bank and the County in connection with the sale and issuance of the Series 2009 Bonds. The Series 2009 Bonds are expected to be available in definitive form for delivery on or about August 26, Date: August 18, MORGAN STANLEY MERRILL LYNCH & CO.

2 MATURITY SCHEDULES $9,490,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BONDS, SERIES 2009A (HARRISON COUNTY, MISSISSIPPI HIGHWAY CONSTRUCTION PROJECT) SERIAL BONDS Maturity Principal Amount Interest Rate Yield Price CUSIP 1 1/1/2010 $1,665, % 0.800% RMG1 1/1/2011 1,885, RMH9 1/1/2012 1,940, RMJ5 1/1/2013 1,980, RMK2 1/1/2014 2,020, RML0 $63,295,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BUILD AMERICA BONDS, SERIES 2009B (HARRISON COUNTY, MISSISSIPPI HIGHWAY CONSTRUCTION PROJECT DIRECT PAYMENT FEDERALLY TAXABLE) TERM BONDS $63,295, % Term Bonds due January 1, 2035, Priced at Par, CUSIP RMF3 (Average Life: Years) 1 The CUSIP numbers listed above are being provided solely for the convenience of the holders of the Series 2009 Bonds only, and the Bank and the Original Purchasers do not make any representation with respect to such numbers or undertake any responsibility for their accuracy. The CUSIP numbers are subject to being changed after the issuance of the Series 2009 Bonds as a result of various subsequent actions, including but not limited to a refunding in whole or in part of the Series 2009 Bonds.

3 THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFERING OF ANY SECURITY OTHER THAN THE ORIGINAL OFFERING OF THE SERIES 2009 BONDS IDENTIFIED ON THE COVER HEREOF. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THAT CONTAINED IN THIS OFFICIAL STATEMENT, AND IF GIVEN OR MADE SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, AND THERE SHALL NOT BE ANY SALE OF THE SERIES 2009 BONDS BY ANY PERSON, IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE INFORMATION AND EXPRESSION OF OPINIONS HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR THE SALE OF ANY OF THE SERIES 2009 BONDS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. INFORMATION HEREIN HAS BEEN OBTAINED FROM THE BANK, THE COUNTY, DTC, THE STATE, THE COMMISSION, MDOT AND OTHER SOURCES BELIEVED TO BE RELIABLE, BUT THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION IS NOT GUARANTEED BY THE ORIGINAL PURCHASERS. UPON ISSUANCE, THE SERIES 2009 BONDS WILL NOT BE REGISTERED BY THE BANK UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL, STATE OR OTHER GOVERNMENTAL ENTITY OR AGENCY, OTHER THAN THE BANK (TO THE EXTENT DESCRIBED HEREIN), WILL HAVE PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT OR APPROVED THE SERIES 2009 BONDS FOR SALE. THIS OFFICIAL STATEMENT IS NOT TO BE CONSTRUED AS A CONTRACT OR AGREEMENT BETWEEN THE BANK AND THE ORIGINAL PURCHASERS OR HOLDERS OF THE SERIES 2009 BONDS. ALL ESTIMATES AND ASSUMPTIONS CONTAINED HEREIN ARE BELIEVED TO BE REASONABLE, BUT NO REPRESENTATION IS MADE THAT SUCH ESTIMATES OR ASSUMPTIONS ARE CORRECT OR WILL BE REALIZED. IN CONNECTION WITH THIS OFFERING, THE ORIGINAL PURCHASERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2009 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THIS OFFICIAL STATEMENT CONTAINS FORECASTS, PROJECTIONS AND ESTIMATES THAT ARE BASED ON EXPECTATIONS AND ASSUMPTIONS WHICH EXISTED AT THE TIME SUCH FORECASTS, PROJECTIONS AND ESTIMATES WERE PREPARED. IN LIGHT OF THE IMPORTANT FACTORS THAT MAY MATERIALLY AFFECT ECONOMIC CONDITIONS IN THE STATE, MDOT AND THE COUNTY, THE INCLUSION IN THIS OFFICIAL STATEMENT OF SUCH FORECASTS, PROJECTIONS AND ESTIMATES SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE BANK, THE COUNTY, THE COMMISSION, MDOT OR THE ORIGINAL PURCHASERS THAT SUCH FORECASTS, PROJECTIONS AND ESTIMATES WILL OCCUR. SUCH FORECASTS, PROJECTIONS AND ESTIMATES ARE NOT INTENDED AS REPRESENTATIONS OF FACT OR GUARANTEES OF RESULTS. IF AND WHEN INCLUDED IN THIS OFFICIAL STATEMENT, THE WORDS "EXPECTS," "FORECASTS," "PROJECTS," "INTENDS," "ANTICIPATES, "ESTIMATES" AND ANALOGOUS EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS AND ANY SUCH STATEMENTS INHERENTLY ARE SUBJECT TO A VARIETY OF RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED. SUCH RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHERS, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN POLITICAL, SOCIAL AND ECONOMIC i

4 CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, LITIGATION AND VARIOUS OTHER EVENTS, CONDITIONS AND CIRCUMSTANCES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE BANK, THE COUNTY, THE COMMISSION AND MDOT. THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS OFFICIAL STATEMENT. THE BANK DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO RELEASE PUBLICLY ANY UPDATES OR REVISIONS TO ANY FORWARD- LOOKING STATEMENT CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE BANK'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED. THE ORIGINAL PURCHASERS HAVE PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFICIAL STATEMENT. THE ORIGINAL PURCHASERS HAVE REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, THEIR RESPECTIVE RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE ORIGINAL PURCHASERS DO NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. TABLE OF CONTENTS Page INTRODUCTION... 1 The Bank... 1 Sources of Payment and Security for the Series 2009 Bonds... 1 Purpose of the Series 2009 Bonds... 3 Authority for Issuance... 3 Description of the Series 2009 Bonds... 3 Tax Exemption... 4 Professionals Involved in the Offering... 4 Offering and Delivery of the Series 2009 Bonds... 5 Risks to the Owners of the Series 2009 Bonds... 5 Other Information... 5 Format of the Official Statement... 6 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS... 6 General... 6 The Loan Agreement and the Series 2009 Notes... 7 Provisions for Payment of the Series 2009 Note Payments... 7 Debt Service Reserve Fund... 8 Additional Bonds The Cooperative Agreement The FHWA Memorandum of Understanding The Intercept Agreement Termination of Forward Interest Rate Swap Agreement The Subsidy Payments DESCRIPTION OF THE HIGHWAY PROJECT RISKS TO THE OWNERS OF THE SERIES 2009 BONDS General Series 2009 Note Payments Tax Covenants Ratings Remedies; Litigation; Bankruptcy Limitation on Enforceability of Security Interest Possible Claims of Third-Party Creditors ii

5 DESCRIPTION OF THE SERIES 2009 BONDS General Description Designation of the Series 2009B Bonds as Build America Bonds Book-Entry-Only System Redemption of the Series 2009A Bonds Redemption of the Series 2009B Bonds General Provisions Relating to Redemption of the Series 2009 Bonds APPLICATION OF THE PROCEEDS OF THE SERIES 2009 BONDS ANNUAL DEBT SERVICE REQUIREMENTS COVENANT LIMITING ISSUANCE OF BONDS UNDER THE MTC ACT BONDS ISSUED UNDER THE MTC ACT Outstanding Bonds THE MISSISSIPPI DEVELOPMENT BANK General Organization and Membership of the Bank Prior Bonds of Bank Operation of the Bank REVENUES, FUNDS AND ACCOUNTS UNDER THE INDENTURE Creation of Funds and Accounts Deposit of Net Proceeds of the Series 2009 Bonds, Revenues and Other Receipts OPERATION OF FUNDS AND ACCOUNTS UNDER THE INDENTURE General Fund Debt Service Reserve Fund and Accounts Rebate Fund for Series 2009A Bonds Amounts Remaining in Funds Investment of Funds THE LOAN AGREEMENT AND THE SERIES 2009 NOTES General Application of Loan Proceeds Plans and Specifications; Construction; the Highway Project Completion of Construction Payment for Costs of the Highway Project Completion of Highway Project Disposition of Surplus Funds Insufficient Loan Proceeds The Loan Basic Payments Under the Loan Agreement Pledge of Project Revenues Additional Charges County's Obligations Unconditional Assignment of Bank's Rights Assignment of the Cooperative Agreement Agreement Withholding County Moneys to Satisfy Delinquent Payments The Loan Account and General Accounts of the General Fund Covenants in Bond Documents Indebtedness and Liens Covenant for the Benefit of the Trustee and the Bondholders Tax Covenants Prepayment of the Series 2009 Notes and Termination of the Loan Agreement Events of Default under the Loan Agreement Remedies under the Loan Agreement iii

6 THE SERIES 2009 BONDS AS LEGAL INVESTMENTS MISSISSIPPI DEPARTMENT OF TRANSPORTATION LITIGATION TAX MATTERS Treatment of Original Issue Discount Treatment of Original Issue Premium LEGAL MATTERS CONTINUING DISCLOSURE RATINGS FINANCIAL ADVISOR UNDERWRITING VALIDATION MISCELLANEOUS APPENDIX A - INFORMATION RELATING TO THE COUNTY APPENDIX B - INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION APPENDIX C - INFORMATION RELATING TO THE STATE OF MISSISSIPPI APPENDIX D - FINANCIAL INFORMATION RELATING TO THE STATE OF MISSISSIPPI (EXCERPTS FROM COMPREHENSIVE ANNUAL REPORT) APPENDIX E - FORM OF INDENTURE OF TRUST APPENDIX F - FORM OF LOAN AGREEMENT APPENDIX G - FORM OF BOND COUNSEL OPINION APPENDIX H - FORM OF CONTINUING DISCLOSURE AGREEMENT APPENDIX I - THE COOPERATIVE AGREEMENT iv

7 OFFICIAL STATEMENT $9,490,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BONDS, SERIES 2009A (HARRISON COUNTY, MISSISSIPPI HIGHWAY CONSTRUCTION PROJECT) and $63,295,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BUILD AMERICA BONDS, SERIES 2009B (HARRISON COUNTY, MISSISSIPPI HIGHWAY CONSTRUCTION PROJECT DIRECT PAYMENT FEDERALLY TAXABLE) INTRODUCTION The purpose of this Official Statement, including its Appendices, is to set forth certain information concerning the issuance and sale by the Mississippi Development Bank (the "Bank") of its Mississippi Development Bank Special Obligation Bonds, Series 2009A (Harrison County, Mississippi Highway Construction Project) dated August 26, 2009 (the "Series 2009A Bonds"), issued in the aggregate principal amount of $9,490,000 and of its Mississippi Development Bank Special Obligation Build America Bonds, Series 2009B (Harrison County, Mississippi Highway Construction Project Direct Payment Federally Taxable) dated August 26, 2009 (the "Series 2009B Bonds," and together with the Series 2009A Bonds, the "Series 2009 Bonds"), issued in the aggregate principal amount of $63,295,000. This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in this entire Official Statement, including the cover page and all Appendices hereto, and the documents summarized or described herein. A full review should be made of this entire Official Statement. The offering of the Series 2009 Bonds to potential investors is made only by means of this entire Official Statement. The Bank The Bank was established in 1986 as a separate body corporate and politic of the State of Mississippi (the "State") for the public purposes set forth under the provisions of Sections et seq., Mississippi Code of 1972, as amended (the "Bank Act"). The Bank is not an agency of the State, is separate from the State in its corporate and sovereign capacity and has no taxing power. The Bank is governed by a Board of Directors composed of nine (9) members. Pursuant to the Bank Act, the purpose of the Bank is to assist "local governmental units," as defined in the Bank Act as (a) any county, municipality, utility district, regional solid waste authority, county cooperative service district or political subdivision of the State, (b) the State or any agency thereof, (c) the institutions of higher learning of the State, (d) any education building corporation established for institutions of higher learning, or (e) any other governmental unit created under State law, through programs of providing loans to such local governmental units under loan agreements between such local governmental units and the Bank. Harrison County, Mississippi (the "County"), the entity described in "APPENDIX A - INFORMATION RELATING TO THE COUNTY," is a local governmental unit under the Bank Act. Sources of Payment and Security for the Series 2009 Bonds In consideration of the loan of the proceeds of the Series 2009A Bonds, the County will issue to the Bank its Promissory Note, Series 2009A (Harrison County, Mississippi Highway Construction Project) dated August 26, 2009 (the "Series 2009A Note") under and pursuant to the Loan Agreement, dated August 26, 2009 (the "Loan 1

8 Agreement"), between the Bank and the County and pursuant to the authority granted by Section (2)(z) and Section et seq. of the Mississippi Code of 1972, as amended (together, the "Authorizing Acts" and together with the Bank Act, the "Acts"). In consideration of the loan of the proceeds of the Series 2009B Bonds, the County will issue to the Bank its Promissory Note, Series 2009B (Harrison County, Mississippi Highway Construction Project Build America Bonds Issue) dated August 26, 2009 (the "Series 2009B Note," and together with the Series 2009A Note, the "Series 2009 Notes") under and pursuant to the Loan Agreement and pursuant to the authority granted by the Acts. The Series 2009 Bonds will be issued under and secured by an Indenture of Trust, dated August 26, 2009 (the "Indenture"), between the Bank and Hancock Bank, Gulfport, Mississippi, as Trustee (the "Trustee"). The principal of, redemption premium, if any, and interest on any and all of the Series 2009 Bonds, together with one or more series (each, a "Series") of bonds (the "Additional Bonds") that may be authorized and issued by the Bank in accordance with the Indenture and the Cooperative Agreement (as hereinafter defined) on a parity with the Series 2009 Bonds (collectively, the "Bonds"), are payable from certain revenues and funds of the Bank which, together with the Loan Agreement and the Series 2009 Notes, are pledged pursuant to the Indenture for the benefit of the owners of the Series 2009 Bonds without priority. The faith, credit and taxing power of the State or of any political subdivision thereof, including the County, are not pledged to the payment of the principal of, redemption premium, if any, and interest on any of the Series 2009 Bonds. The Series 2009 Bonds are not a debt, liability, loan of the credit of the State or of any political subdivision thereof, including the County. The Bank has no taxing power and has only those powers and sources of revenue set forth in the Bank Act. THE SERIES 2009 BONDS ARE ISSUED AND SECURED SEPARATELY FROM ANY OTHER OBLIGATIONS ISSUED BY THE BANK EXCEPT FOR THE MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BONDS, SERIES 2005 (HARRISON COUNTY, MISSISSIPPI HIGHWAY CONSTRUCTION PROJECT) IN THE ORIGINAL PRINCIPAL AMOUNT OF $102,000,000, DATED OCTOBER 19, 2005 (THE "SERIES 2005 BONDS"). THE SERIES 2005 BONDS, THE SERIES 2009 BONDS AND ADDITIONAL BONDS, IF ANY, ARE PAYABLE ON A PARITY FROM THE PROJECT REVENUES (AS HEREINAFTER DEFINED) PROVIDED TO THE COUNTY PURSUANT TO THE COOPERATIVE AGREEMENT (AS HEREINAFTER DEFINED) AND FROM INTERCEPT MONEYS (AS HEREINAFTER DEFINED). The Series 2009 Bonds are secured by the pledge of the Trust Estate established under the Indenture (the "Trust Estate"), defined to be (a) all cash and securities in the funds and accounts established by the Indenture (except the Rebate Fund, as described herein) (the "Funds" and "Accounts") and the investment earnings thereon and all proceeds thereof, (b) the Loan Agreement and the Series 2009 Notes and payments due thereunder and the earnings thereon and the proceeds thereof, (c) the Interlocal Cooperative Agreement, dated January 24, 2005, as amended by that certain Amended and Restated Interlocal Cooperative Agreement, dated October 19, 2005 (collectively, the "Cooperative Agreement"), between the Mississippi Transportation Commission (the "Commission") and the County, including the amounts payable by the Commission to the County (the "Project Revenues") pursuant to the Cooperative Agreement, which Project Revenues include federal aid highway funds available to the Mississippi Department of Transportation ("MDOT") from the Federal Highway Administration ("FHWA") and amounts appropriated by the Mississippi Legislature to MDOT; and (d) all funds, accounts and moneys pledged in the Indenture to the Trustee as security by the Bank, including Intercept Moneys (as hereinafter defined). All Series 2009 Bonds will be secured equally and ratably by all of the foregoing. The sources of payment for the Series 2009 Bonds are further described under the captions "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS," "APPENDIX B - INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION," "APPENDIX E - FORM OF INDENTURE OF TRUST," and "APPENDIX I - THE COOPERATIVE AGREEMENT." MDOT, by and through the Commission, and FHWA have entered into a Memorandum of Understanding (the "Memorandum of Understanding") concerning the Highway Project (as hereinafter described). FHWA has agreed in the Memorandum of Understanding to the application of federal funds, if appropriated, to reimburse the Commission for a portion of amounts the Commission has agreed to pay the County under and pursuant to the Cooperative Agreement. 2

9 The Indenture provides that in order to further secure the payment of principal of and interest on the Series 2009 Bonds, the Bank will establish thereunder a debt service reserve fund (the "Debt Service Reserve Fund") containing therein an account securing the Series 2009A Bonds (the "Series 2009A Debt Service Reserve Account") and an account securing the Series 2009B Bonds (the "Series 2009B Debt Service Reserve Account"). There will be maintained in the Series 2009A Debt Service Reserve Account an amount (the "Series 2009A Debt Service Reserve Requirement") equal to $949,000, provided that the amount of the Series 2009A Debt Service Reserve Requirement shall never exceed the lesser of the following: (a) the maximum amount of principal and interest becoming due in the current or any future bond year (meaning each one year period beginning on July 1 of one year and ending on June 30 of the following year, provided that the first bond year shall begin on August 26, 2009 and end on June 30, 2010) on all Series 2009A Bonds then Outstanding; (b) 125% of average annual debt service on the Series 2009A Bonds; or (c) 10% of the stated principal amount of the Series 2009A Bonds. There will be maintained in the Series 2009B Debt Service Reserve Account an amount (the "Series 2009B Debt Service Reserve Requirement") equal to $6,329,500, provided that the amount of the Series 2009B Debt Service Reserve Requirement shall never exceed the lesser of the following: (a) the maximum amount of principal and interest becoming due in the current or any future bond year (meaning each one year period beginning on July 1 of one year and ending on June 30 of the following year, provided that the first bond year shall begin on August 26, 2009 and end on June 30, 2010) on all Series 2009B Bonds then Outstanding; (b) 125% of average annual debt service on the Series 2009B Bonds; or (c) 10% of the stated principal amount of the Series 2009B Bonds. See the captions "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS - Debt Service Reserve Fund" for further discussion of the Debt Service Reserve Fund, the Series 2009A Debt Service Reserve Account and the Series 2009B Debt Service Reserve Account. Purpose of the Series 2009 Bonds The Series 2009 Bonds are being issued to provide funds to finance a loan (the "Loan") to the County under the Loan Agreement secured by the Series 2009 Notes to provide funds for the Project (as hereinafter defined), which includes (a) constructing a North-South connector route from Interstate 10, at a point west of the present U.S. Highway 49 and Interstate 10 interchange, to U.S. Highway 90, including construction of interchanges at Interstate 10 and U.S. Highway 90, together with related improvements and infrastructure (collectively, the "Highway Project"); (b) funding the Debt Service Reserve Fund; (c) providing for the payment of the Termination Payment (as hereinafter defined) or a portion thereof; and (d) paying the Costs of Issuance of the Series 2009 Bonds and the Series 2009 Notes (collectively, the "Project"). The sources of payment on the Loan Agreement and the Series 2009 Notes are described under the captions "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS," "APPENDIX F - FORM OF LOAN AGREEMENT" and "APPENDIX I - THE COOPERATIVE AGREEMENT." Authority for Issuance The Series 2009 Bonds are issued pursuant to the provisions of the Acts and the Indenture. Description of the Series 2009 Bonds Redemption. The Series 2009 Bonds are subject to extraordinary and mandatory sinking fund redemption prior to maturity, as more fully described under the captions "DESCRIPTION OF THE SERIES 2009 BONDS Redemption of the Series 2009A Bonds" and "DESCRIPTION OF THE SERIES 2009 BONDS Redemption of the Series 2009B Bonds." Denominations. The Series 2009A Bonds will be issued in denominations of $5,000 or any integral multiple thereof. The Series 2009B Bonds will be issued in denominations of $1,000 or any integral multiple thereof. Payments. Interest on the Series 2009 Bonds is payable on January 1 and July 1 of each year (each an "Interest Payment Date"), commencing January 1, 2010, and, so long as The Depository Trust Company ("DTC") or its nominee is the registered owner of the Series 2009 Bonds, such interest, together with the principal of and redemption premium, if any, on the Series 2009 Bonds will be paid directly to DTC by the Trustee. The final disbursement of such payments to the Beneficial Owners (as hereinafter defined) of the Series 2009 Bonds will be the responsibility of the DTC Participants and the Indirect Participants (as such terms are hereinafter defined), 3

10 all as more fully defined and described herein under the caption "DESCRIPTION OF THE SERIES 2009 BONDS - Book-Entry-Only System." Build America Bonds. The Bank has elected to designate the Series 2009B Bonds as "Build America Bonds" for purposes of the American Recovery and Reinvestment Act of 2009 (the "Recovery Act"). The Recovery Act authorizes the Bank to issue taxable bonds known as "Build America Bonds" to finance capital expenditures for which it could issue tax-exempt bonds and to elect to receive a payment (the "Subsidy Payments"), contemporaneously with each interest payment date for such bonds, equal to 35% of the interest payable on such bonds on such date. The Subsidy Payments for the Series 2009B Bonds will be paid to the Commission on behalf of the Bank, and holders of the Series 2009B Bonds will not be entitled to receive any tax credits with respect to the Series 2009B Bonds. The receipt of the Subsidy Payments by the Bank is subject to certain conditions precedent, including the filing of a form with the Internal Revenue Service prior to each Interest Payment Date. The Subsidy Payments are not full faith and credit obligations of the United States of America. See "DESCRIPTION OF THE SERIES 2009 BONDS Designation of the Series 2009B Bonds as Build America Bonds." The Subsidy Payments are not included in the Trust Estate and do not provide security for the Series 2009 Bonds. Registration, Transfers, and Exchanges. The Series 2009 Bonds will be issued only as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee for DTC. Purchases of beneficial interests in the Series 2009 Bonds will be made in book entry only form. Purchasers of beneficial interests in the Series 2009 Bonds will not receive physical delivery of certificates representing their respective interests in the Series 2009 Bonds. For a more complete description of the Series 2009 Bonds and the basic documentation pursuant to which the Series 2009 Bonds are being issued, see the captions "DESCRIPTION OF THE SERIES 2009 BONDS," "REVENUES, FUNDS AND ACCOUNTS UNDER THE INDENTURE," and "OPERATION OF FUNDS AND ACCOUNTS UNDER THE INDENTURE" in this Official Statement. Tax Exemption In the opinion of Bond Counsel (as hereinafter defined), under existing laws, regulations, rulings, and judicial decisions, interest on the Series 2009A Bonds is excludable from gross income for federal income tax purposes, with such exclusion conditioned upon continuing compliance with certain tax covenants of the Bank, the County and MDOT. Interest on the Series 2009A Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and interest on the Series 2009A Bonds is not taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on corporations. Interest on the Series 2009B Bonds should be treated as includible in gross income of the holders thereof for federal income tax purposes. Under existing laws, regulations, rulings, and judicial decisions, interest on the Series 2009A Bonds and the Series 2009B Bonds is exempt from income taxation in the State. For a more complete description of the opinion of Bond Counsel and certain other income tax consequences incident to the ownership of the Series 2009 Bonds, see the caption "TAX MATTERS" in this Official Statement. See "APPENDIX G - FORM OF BOND COUNSEL OPINION" for the proposed form of Bond Counsel opinion. Professionals Involved in the Offering Hancock Bank, Gulfport, Mississippi, will act as Trustee under the Indenture for the Series 2009 Bonds. Government Consultants, Inc., Jackson, Mississippi, is employed as financial advisor (the "Financial Advisor") to the Bank and the County with respect to the Series 2009 Bonds. Certain proceedings in connection with the issuance of the Series 2009 Bonds are subject to the approval of Butler, Snow, O'Mara, Stevens & Cannada, PLLC, Jackson, Mississippi ("Bond Counsel"). Certain legal matters will be passed upon for the Bank by its counsel, Balch & Bingham LLP, Jackson, Mississippi. Certain legal matters will be passed upon for the County by its counsel, Holleman & Associates, Gulfport, Mississippi, for the Original Purchasers (as hereinafter defined) by 4

11 their counsel, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Jackson, Mississippi, and for MDOT and the Commission by their counsel, the Special Assistant Attorney General of Mississippi assigned to MDOT. See the captions "LEGAL MATTERS" and "FINANCIAL ADVISOR" in this Official Statement. Offering and Delivery of the Series 2009 Bonds The Series 2009 Bonds are being offered for sale by Morgan Stanley & Co. Incorporated, New York, New York, as representative of itself and the other underwriters named on the front cover of this Official Statement (the "Original Purchasers"), and are subject to the final approval of the legality thereof by Bond Counsel. The Series 2009 Bonds are expected to be available in definitive form for delivery on or about August 26, Risks to the Owners of the Series 2009 Bonds There are certain risks involved in the ownership of the Series 2009 Bonds which should be considered by prospective purchasers thereof. The ability of the Bank to pay principal of, redemption premium, if any, and interest on the Series 2009 Bonds depends primarily upon the receipt by the Bank of note payments (the "Series 2009 Note Payments") from the County which is obligated under the Loan Agreement and the Series 2009 Notes to make such payments to the Bank, together with investment earnings on certain amounts in the Funds and Accounts defined in and established under the Indenture. The County's only source of revenues to make the Series 2009 Note Payments is the payment of Project Revenues the County is to receive from MDOT under the Cooperative Agreement. THERE CAN BE NO REPRESENTATION OR ASSURANCE THAT THE COUNTY WILL REALIZE SUFFICIENT PROJECT REVENUES THROUGH THE COOPERATIVE AGREEMENT WITH THE COMMISSION AND MDOT TO MAKE THE REQUIRED PAYMENTS ON THE SERIES 2009 NOTES. IN ADDITION, THERE CAN BE NO REPRESENTATION OR ASSURANCE THAT MDOT WILL REALIZE SUFFICIENT REVENUES FROM THE STATE AND FHWA TO MAKE THE REQUIRED PAYMENTS TO THE COUNTY UNDER THE COOPERATIVE AGREEMENT. For discussion of the annual budget of MDOT, which is subject to annual appropriation by the State Legislature, see the caption "Annual Budget" under "APPENDIX B - INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION" in this Official Statement. To review the form of the Cooperative Agreement, see "APPENDIX I - THE COOPERATIVE AGREEMENT." For discussion of the Intercept Agreement which provides for the intercept of Project Revenues payable by MDOT to the County to satisfy delinquent payments under the Loan Agreement, see the caption "The Intercept Agreement" under "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS" and "THE LOAN AGREEMENT AND THE SERIES 2009 NOTES Agreement Withholding County Moneys to Satisfy Delinquent Payments." Failure of the Bank, the County and MDOT to comply with certain tax covenants may also adversely affect the exempt status of the interest on all of the Series 2009A Bonds. See the caption "RISKS TO THE OWNERS OF THE SERIES 2009 BONDS". Other Information This Official Statement speaks only as of its date, and certain information contained herein is subject to change. Copies of other documents and information are available, upon request, and upon payment to the Bank of a charge for copying, mailing, and handling, from William T. Barry, Executive Director, Mississippi Development Bank, 735 Riverside Drive, Suite 300, Jackson, Mississippi 39202, telephone (601) NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, AND THERE SHALL NOT BE ANY SALE OF THE SERIES 2009 BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO 5

12 MAKE SUCH OFFER, SOLICITATION OR SALE. THE INFORMATION SET FORTH HEREIN HAS BEEN OBTAINED FROM THE BANK, THE COUNTY, DTC, THE COMMISSION, MDOT AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE BANK SINCE THE DATE HEREOF. Format of the Official Statement There follows in this Official Statement a description of the security and sources of payment for the Series 2009 Bonds, the funding of the Highway Project with the proceeds of the Series 2009 Bonds, the Bank, and summaries of certain provisions of the Series 2009 Bonds, the Indenture, the Loan Agreement, and certain provisions of the Acts. All discussions of the Acts, the Indenture and the Loan Agreement are qualified in their entirety by reference to the Acts, copies of which are available from the Bank, and the Indenture and the Loan Agreement, the forms of which are set forth in "APPENDIX E - FORM OF INDENTURE OF TRUST" and "APPENDIX F - FORM OF LOAN AGREEMENT" hereto, and all discussions of the Series 2009 Bonds are qualified in their entirety by reference to the definitive form and the information with respect to the Series 2009 Bonds contained in the Indenture. Certain information relating to the County is set forth in "APPENDIX A - INFORMATION RELATING TO THE COUNTY," certain information relating to the Mississippi Department of Transportation is included in "APPENDIX B - INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION," certain information relating to the State is included in "APPENDIX C INFORMATION RELATING TO THE STATE OF MISSISSIPPI," certain financial information of the State is included in "APPENDIX D FINANCIAL INFORMATION RELATING TO THE STATE OF MISSISSIPPI," the proposed form of opinion of Bond Counsel with respect to the Series 2009 Bonds is set forth in "APPENDIX G - FORM OF BOND COUNSEL OPINION", the form of the continuing disclosure agreement among the Bank, the Trustee and the County is set forth in "APPENDIX H - FORM OF CONTINUING DISCLOSURE AGREEMENT," and the form of the Cooperative Agreement is set forth in "APPENDIX I - THE COOPERATIVE AGREEMENT." Each of the Appendices to this Official Statement is an integral part of this Official Statement and should be read in its entirety by any and all owners or prospective owners of the Series 2009 Bonds. Capitalized terms not defined herein shall have the definitions set forth in "APPENDIX E - FORM OF INDENTURE OF TRUST" and "APPENDIX F - FORM OF LOAN AGREEMENT." General SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS The Series 2009 Bonds are payable only out of, and are secured by the pledge of, the Trust Estate. The Indenture creates a continuing pledge of and lien upon the Trust Estate to secure the full and final payment of the principal of, redemption premium, if any, and interest on all of the Series 2009 Bonds. The Series 2009 Bonds do not constitute a debt, liability or loan of the credit of the State or any political subdivision thereof, including the County, under the Constitution of the State or a pledge of the faith, credit and taxing power of the State or any political subdivision thereof, including the County. The Bank has no taxing power. The sources of payment of, and security for, the Series 2009 Bonds are more fully described below. Under the Indenture, the Series 2009 Bonds are secured by the assignment from the Bank to the Trustee of the Series 2009 Notes and all Series 2009 Note Payments, as described herein, and are also secured by Intercept Moneys (as hereinafter defined) and the assignment from the County to the Trustee of the Cooperative Agreement in accordance with the Assignment Agreement from the County to the Trustee (the "Assignment Agreement"). In addition, the Indenture pledges to the payment of the Series 2009 Bonds all proceeds of the Trust Estate, including without limitation all cash and securities held in the Funds and Accounts created by the Indenture, except for the Rebate Fund, together with investment earnings thereon and proceeds thereof (except to the extent transferred to the Rebate Fund from such Funds and Accounts under the Indenture), which includes 6

13 the Project Revenues payable under and pursuant to the Cooperative Agreement and all other funds, accounts and moneys hereinafter to be pledged by the Bank to the Trustee as security under the Indenture, to the extent of any such pledge, including the Intercept Moneys. The Series 2005 Bonds, the Series 2009 Bonds and any Series of Additional Bonds, if issued, shall be payable on a parity from the Project Revenues and the Intercept Moneys. The Loan Agreement and the Series 2009 Notes From the proceeds of the Series 2009 Bonds, the Bank intends to loan funds to the County under the Loan Agreement to be secured by the Series 2009 Notes. The Bank will assign to the Trustee under the Indenture the proceeds of the Loan Agreement and will assign the Series 2009 Notes and the Series 2009 Note Payments to the Trustee, all as described under the caption "THE LOAN AGREEMENT AND THE SERIES 2009 NOTES" and in "APPENDIX F - FORM OF LOAN AGREEMENT". Provisions for Payment of the Series 2009 Note Payments The Series 2009 Notes will be limited obligations of the County payable solely from the moneys, rights and interests pledged under the Loan Agreement as set forth in the immediately succeeding paragraph. The Series 2009 Notes will never constitute general obligations of the County or, within the meaning of any constitutional or statutory limitation, debts, liabilities, or obligations of the State or any political subdivision of the State, including the County, and neither the full faith and credit nor taxing power of the State or any political subdivision thereof, including the County, is pledged to the payment of the principal of, redemption premium, if any, and interest on the Series 2009 Notes. The County has not pledged the levy of any taxes for the repayment of the Series 2009 Notes. The Series 2009 Notes issued under the Loan Agreement shall be issued for the purposes of providing funds to finance the Project. Pursuant to the terms of the Loan Agreement, the County has pledged only the Project Revenues for the payment of principal of, redemption premium, if any, and interest on the Series 2009 Notes and other amounts due under the Loan Agreement. Project Revenues are all revenues received by the County from MDOT pursuant to the Cooperative Agreement. In addition, the Acts and the Loan Agreement provide for the intercept of any moneys (the "Intercept Moneys") which the County (or the Trustee as assignee of the County) is entitled to receive from time to time from MDOT pursuant to the Cooperative Agreement, which moneys MDOT has included in its annual budget for debt service and have been appropriated by the State Legislature in accordance with law, and which are in possession of the Office of the State Treasurer, the Commission, MDOT or any other State agency, department or commission created by State law, if the County is deficient in its payments due under the Loan Agreement and the Series 2009 Notes. See "THE LOAN AGREEMENT AND THE SERIES 2009 NOTES - Agreement Withholding County Moneys to Satisfy Delinquent Payments". MDOT has covenanted in the Cooperative Agreement to take such action as may be necessary to include the Project Revenues and any other amounts necessary and due under the Loan Agreement in its annual budget. For discussion of the annual budget of MDOT, which is subject to annual appropriation by the State Legislature, see the caption "Annual Budget" under "APPENDIX B - INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION". For discussion of the Intercept Agreement which provides for the intercept of certain funds received by the County from MDOT to satisfy delinquent payments under the Loan Agreement, see the caption "The Intercept Agreement" under "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS" and "THE LOAN AGREEMENT AND THE SERIES 2009 NOTES Agreement Withholding County Moneys to Satisfy Delinquent Payments". The obligation of the County to make Series 2009 Note Payments and pay amounts due under the Loan Agreement constitutes a binding limited obligation of the County in accordance with the terms of the Series 2009 Notes and the Loan Agreement, respectively. The obligation of MDOT to make the payments of Project Revenues pursuant to the Cooperative Agreement, which payments equal the Series 2009 Note Payments, constitutes a binding limited obligation of MDOT in accordance with the terms of the Cooperative Agreement. Such payments of MDOT as included in its annual budget are subject to annual appropriation by the Mississippi Legislature. In addition, the moneys available from FHWA to MDOT to make payments of a portion of the Project Revenues are subject to annual appropriation by the Congress of the United States of America. 7

14 The amounts owed under the Loan Agreement and the Series 2009 Notes are payable from Project Revenues on a parity of lien with amounts owed under the Harrison County, Mississippi Promissory Note, Series 2005 (Harrison County, Mississippi Highway Construction Project), dated October 19, 2005 (the "Series 2005 Note"), issued by the County under and pursuant to that certain Loan Agreement, dated as of October 19, 2005 (the "Series 2005 Loan Agreement"), between the Bank and the County and with amounts which may be owed under an Additional Bonds Loan Agreement (as hereinafter defined), if any, and a promissory note (an "Additional Note") which may be issued by the County in connection therewith. Neither the Bank, the County nor MDOT can provide any certainty that any Additional Bonds Loan Agreement (as hereinafter defined) will be entered into or that any Additional Note will be issued. EXCEPT AS STATED IN THE INDENTURE, NOTHING IN THE LOAN AGREEMENT, THE SERIES 2009 NOTES OR THE COOPERATIVE AGREEMENT CREATES A LIEN OF ANY KIND OR CHARACTER WHATSOEVER UPON ANY FUNDS, INCOME OR REVENUE NOW EXISTING OR HEREAFTER HELD, COLLECTED, RECEIVED, ANTICIPATED BY, OR AVAILABLE TO THE COUNTY OR MDOT OR PREVENTS OR RESTRICTS THE COUNTY OR MDOT AT ANY TIME FROM PLEDGING, OBLIGATING OR CREATING SPECIFIC LIENS UPON FUNDS, INCOME OR REVENUES TO OR FOR THE PAYMENT OF ANY BONDS, NOTES OR CERTIFICATES OF THE COUNTY OR MDOT OR FOR ANY OTHER PURPOSE WHATSOEVER. SEE "COVENANTS LIMITING ISSUANCE OF ADDITIONAL BONDS" AND "APPENDIX B - INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION". The obligations of the County under the Series 2009 Notes and the Loan Agreement are not general obligations and do not constitute a pledge of the full faith and credit of the County, the State or any political subdivision or agency thereof within the meaning of any constitutional or statutory provision or limitation. The County has not pledged or levied any form of taxation for the payment of the Series 2009 Notes or amounts due under the Loan Agreement. See "APPENDIX F - FORM OF THE LOAN AGREEMENT" for a further description of the Loan Agreement and the Series 2009 Notes. Debt Service Reserve Fund The Bank Act authorizes and the Indenture requires the Bank to establish and maintain the Debt Service Reserve Fund with the Series 2009A Debt Service Reserve Account therein in the amount of the Series 2009A Debt Service Reserve Requirement as security for the Series 2009A Bonds and the Series 2009B Debt Service Reserve Account therein in the amount of the Series 2009B Debt Service Reserve Requirement as security for the Series 2009B Bonds. There is to be deposited or transferred into the Series 2009A Debt Service Reserve Account: (a) All proceeds of Series 2009A Bonds required to be deposited in the Series 2009A Debt Service Reserve Account by the terms of the Indenture or any supplemental indenture or resolution of the Bank with respect to the proceeds of Series 2009A Bonds. The Series 2009A Debt Service Reserve Requirement shall be $949,000, provided that the amount of the Series 2009A Debt Service Reserve Requirement shall never exceed the lesser of the (1) the maximum amount of principal and interest becoming due in the current or any future bond year (meaning each one year period beginning on July 1 of one year and ending on June 30 of the following year, provided that the first bond year shall begin on August 26, 2009 and end on June 30, 2010) on all Series 2009A Bonds then Outstanding; (2) 125% of average annual debt service on the Series 2009A Bonds; or (3) 10% of the stated principal amount of the Series 2009A Bonds; (b) All money required to be transferred to the Series 2009A Debt Service Reserve Account from another Fund or Account under the Indenture; (c) All money paid by the County for deposit to the Series 2009A Debt Service Reserve Account as provided in the Loan Agreement; and (d) Any other available money or funds that the Bank may decide to deposit in the Series 2009A Debt Service Reserve Account. 8

15 There is to be deposited or transferred into the Series 2009B Debt Service Reserve Account: (a) All proceeds of Series 2009B Bonds required to be deposited in the Series 2009B Debt Service Reserve Account by the terms of the Indenture or any supplemental indenture or resolution of the Bank with respect to the proceeds of Series 2009B Bonds. The Series 2009B Debt Service Reserve Requirement shall be $6,329,500, provided that the amount of the Series 2009B Debt Service Reserve Requirement shall never exceed the lesser of the (1) the maximum amount of principal and interest becoming due in the current or any future bond year (meaning each one year period beginning on July 1 of one year and ending on June 30 of the following year, provided that the first bond year shall begin on August 26, 2009 and end on June 30, 2010) on all Series 2009B Bonds then Outstanding; (2) 125% of average annual debt service on the Series 2009B Bonds; or (3) 10% of the stated principal amount of the Series 2009B Bonds; (b) All money required to be transferred to the Series 2009B Debt Service Reserve Account from another Fund or Account under the Indenture; (c) All money paid by the County for deposit to the Series 2009B Debt Service Reserve Account as provided in the Loan Agreement; and (d) Any other available money or funds that the Bank may decide to deposit in the Series 2009B Debt Service Reserve Account. Except as otherwise provided by the Indenture, moneys in the Series 2009A Debt Service Reserve Account will be held and applied to the payment of the principal of and interest on the Series 2009A Bonds in cases where sufficient funds are not available in other Funds and Accounts for such payments, and moneys in the Series 2009B Debt Service Reserve Account will be held and applied to the payment of the principal of and interest on the Series 2009B Bonds in cases where sufficient funds are not available in other Funds and Accounts for such payments. Pursuant to the Indenture, as of any Interest Payment Date, the Trustee shall value the investments in the Series 2009A Debt Service Reserve Account and the investments in the Series 2009B Debt Service Reserve Account at fair market value. If there is any deficiency in the Series 2009A Debt Service Reserve Account and/or the Series 2009B Debt Service Reserve Account as of any Interest Payment Date (after taking into account any debt service payment made on such Interest Payment Date), the Trustee shall provide written notice within five (5) Business Days to the County and MDOT, and the County (from revenues received by the County from MDOT pursuant to the Cooperative Agreement) shall replenish the Series 2009A Debt Service Reserve Account to an amount equal to the Series 2009A Debt Service Reserve Requirement and/or shall replenish the Series 2009B Debt Service Reserve Account to an amount equal to the Series 2009B Debt Service Reserve Requirement, as applicable, within thirty (30) days after the applicable Interest Payment Date as provided in the Loan Agreement. Business Day is defined as any day, other than a Saturday or Sunday, on which the Trustee's offices, the County s offices or MDOT's offices are not closed and on which the payment system of the Federal Reserve System, New Orleans Branch, is operational. Pursuant to the Indenture, failure to restore any deficiency in the Series 2009A Debt Service Reserve Account to the Series 2009A Debt Service Reserve Requirement within 370 days after the date of any draw from the Series 2009A Debt Service Reserve Account is an "event of default" under the Indenture. In addition, pursuant to the Indenture, failure to restore any deficiency in the Series 2009B Debt Service Reserve Account to the Series 2009B Debt Service Reserve Requirement within 370 days after the date of any draw from the Series 2009B Debt Service Reserve Account is an "event of default" under the Indenture. Following each Interest Payment Date, the Trustee shall (a) determine if any amounts in the Series 2009A Debt Service Reserve Account of the Debt Service Reserve Fund are in excess of the Series 2009A Debt Service Reserve Requirement and shall transfer said excess amount to the Series 2009A General Account of the General Fund, and (b) determine if any amounts in the Series 2009B Debt Service Reserve Account of the Debt Service Reserve Fund are in excess of the Series 2009B Debt Service Reserve Requirement and shall transfer said excess amount to the Series 2009B General Account of the General Fund; provided, however, such amounts in excess of the Series 2009A Debt Service Reserve Requirement and/or the Series 2009B Debt Service Reserve 9

16 Requirement, as applicable, shall be paid to MDOT at the request of MDOT with the prior written approval of the Bank. Additional Bonds Additional Bonds may be issued under and secured by a Supplemental Indenture or a separate indenture for the purpose of providing funds for (1) the refunding of all or any portion of the Series 2009 Bonds ("Refunding Bonds"), or (2) the completion of the Highway Project ("Completion Bonds"), upon compliance with the provisions in the Indenture and as set forth below: (a) No "event of default" under the Indenture has occurred and is then continuing and MDOT, the County and the Bank shall have approved the issuance of such Refunding Bonds or Completion Bonds, as applicable; (b) The requirements of the Indenture relating to the issuance of Bonds have been met; (c) There shall have been filed with the Trustee an opinion of Bond Counsel to the effect that the exclusion from "gross income" for federal income tax purposes of the interest on the Series 2009A Bonds then Outstanding under the Indenture shall not be adversely affected; (d) The issuance of Additional Bonds is permitted under the Acts; and (e) Following the issuance of any Additional Bonds or Refunding Bonds, the principal amount of the Bonds (as defined in the Indenture) outstanding shall not exceed the principal amount of Bonds or MDB Loans (as defined in the Cooperative Agreement) authorized for the Highway Project pursuant to the Cooperative Agreement. Refunding Bonds may be authenticated and delivered only upon receipt by the Trustee (in addition to the receipt by the Trustee of the documents required by the Indenture with respect to the issuance of Bonds which are not Refunding Bonds) of: (a) Irrevocable instructions to the Trustee, satisfactory to it, to give due notice of redemption of all the Series 2009 Bonds to be refunded on the redemption date specified in such instructions; (b) Irrevocable instructions to the Trustee, satisfactory to it, to give notice of redemption as provided in the Indenture to the owners of the Series 2009 Bonds being refunded; and (c) All documentation, if any, required by the provisions of the Indenture dealing with the defeasance of the Series 2009 Bonds to be refunded. The Cooperative Agreement The County and the Commission entered into the Cooperative Agreement in order to accelerate the construction of the Highway Project, pursuant to Section (2)(z), Mississippi Code of 1972, as amended (the "MTC Act"). Under the Cooperative Agreement, the County is responsible for providing funds necessary to construct the Highway Project, while the Commission is responsible for the completion of the Highway Project and the repayment of the funds borrowed by the County under the Loan Agreement, the Series 2005 Loan Agreement and any loan agreement entered into in connection with the issuance of a Series of Additional Bonds (an "Additional Bonds Loan Agreement"). Under the Cooperative Agreement, the Commission may use any legally available revenues, which are included in its annual budget and are subject to annual appropriation by the Mississippi Legislature, to pay the debt service on the Series 2009 Bonds, the Series 2005 Bonds and any Series of Additional Bonds, which includes any federal aid highway funds received by the Commission. The Commission is directed in the Cooperative Agreement to pay debt service on the Series 2009 Bonds, the Series 2005 Bonds and any Series of Additional Bonds directly to the Trustee as assignee of the County under the Assignment Agreement. The Cooperative Agreement authorizes the incurrence of up to $300,000,000 in principal amount of indebtedness (the "Cooperative Agreement Debt Limit") by the County to finance the construction of certain highway projects described in the Cooperative Agreement, including but not limited to the Highway Project. Any such indebtedness evidenced by a Series of Additional Bonds will be issued on a parity of lien as to Project 10

17 Revenues with the Series 2005 Bonds and the Series 2009 Bonds. After the issuance of the Series 2009 Bonds, the County will be able to incur $125,215,000 in principal amount of indebtedness pursuant to the Cooperative Agreement without exceeding the Cooperative Agreement Debt Limit. For a more detailed discussion, see "APPENDIX B INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION" and "APPENDIX I THE COOPERATIVE AGREEMENT." The FHWA Memorandum of Understanding The Memorandum of Understanding recognizes the desire of the Commission and MDOT, and the approval of FHWA, to use federal aid highway funds available to MDOT for reimbursement of debt service on the Series 2009 Bonds rather than for reimbursement to MDOT of the construction costs of the Highway Project. It establishes a procedure for MDOT to request semiannual reimbursement from FHWA for its payment of such debt service under the Cooperative Agreement. Any Subsidy Payments received by the Commission shall be taken into account when the Commission requests reimbursement from FHWA pursuant to the Memorandum of Understanding. THE FUNDS TO BE USED BY FHWA TO REIMBURSE MDOT ARE SUBJECT TO ANNUAL APPROPRIATION AND PERIODIC RE-AUTHORIZATION BY THE CONGRESS OF THE UNITED STATES OF AMERICA. The Intercept Agreement Pursuant to the Intercept Agreement, the Bank and the County authorize and direct the Trustee under the provisions thereof to file the Intercept Agreement and a statement of deficiency setting forth the amount of any Delinquent Payment (defined in the Intercept Agreement as delinquent debt service payments on the Series 2009 Bonds), with the Office of the State Treasurer, the Commission, MDOT, or any other State agency thereby directing such agency to pay any Intercept Moneys directly to the Trustee to satisfy any Delinquent Payment. Intercept Moneys are any moneys which the County is entitled to receive from time to time from MDOT pursuant to the Cooperative Agreement, which MDOT has included in its annual budget and which have been appropriated by the Mississippi Legislature in accordance with law, and which are in possession of the Office of the State Treasurer, the Commission, MDOT or any other State agency, department or commission created pursuant to State law. The payment of Intercept Moneys to the Trustee to satisfy any Delinquent Payment is subject to the payment of Intercept Moneys to the Trustee to satisfy any delinquent payment with respect to the Series 2005 Bonds (the "Series 2005 Delinquent Payment"). If, at any time, there are Delinquent Payments or Series 2005 Delinquent Payments occurring simultaneously under the Loan Agreement or the Series 2005 Loan Agreement, respectively, the Indenture directs the Trustee to apply the Intercept Moneys to the Delinquent Payments and the Series 2005 Delinquent Payments on a proportionate basis. If a Series of Additional Bonds is ever issued and delinquent debt service payments occur with respect to such Additional Bonds ("Additional Bonds Delinquent Payments"), it is contemplated by the Bank, the County and MDOT that any such Additional Bonds Delinquent Payments would proportionately share Intercept Moneys with the Series 2005 Delinquent Payments, if any, and the Delinquent Payments, if any. The Bank previously entered into similar separate intercept agreements with Tunica County, Mississippi, the County, the City of Laurel, Mississippi, Madison County, Mississippi, DeSoto County, Mississippi and the Marshall County Industrial Development Authority in connection with the Mississippi Development Bank Special Obligation Bonds, Series 2005 (Tunica County, Mississippi Highway Construction Project) in the original principal amount of $45,000,000, dated January 6, 2005 (the "Tunica County Bonds"), the Series 2005 Bonds, the Mississippi Development Bank Special Obligation Bonds, Series 2005 (City of Laurel, Mississippi Highway Construction Project) in the original principal amount of $32,000,000, dated October 19, 2005 (the "City of Laurel Bonds"), the Mississippi Development Bank Special Obligation Bonds, Series 2006 (Madison County, Mississippi Highway Construction Project) in the original principal amount of $145,000,000, dated October 11, 2006 (the "Madison County Bonds"), the Mississippi Development Bank Special Obligation Bonds, Series 2007 (DeSoto County, Mississippi Highway Construction Project) in the original principal amount of $31,000,000, dated October 18, 2007 (the "DeSoto County Bonds") and the Mississippi Development Bank Special Obligation Bonds, Series 2007 (Marshall County Industrial Development Authority, Mississippi Highway Construction Project) in the original principal amount of $52,000,000, dated October 18, 2007 (the "Marshall County IDA Bonds"), respectively. 11

18 The Tunica County Bonds, the Series 2005 Bonds, the City of Laurel Bonds, the Madison County Bonds, the DeSoto County Bonds and the Marshall County IDA Bonds are payable from sources similar to the sources of payment for the Series 2009 Bonds. See "ADDITIONAL BONDS ISSUED UNDER THE MTC ACT" for more information. SEE "APPENDIX B INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION ADDITIONAL INTERCEPT AGREEMENTS" FOR A DISCUSSION OF ADDITIONAL INTERCEPT AGREEMENTS THAT MDOT HAS ENTERED INTO WITH THE BANK WHICH ARE PAYABLE FROM SOURCES SIMILAR TO THE SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS, THE TUNICA COUNTY BONDS, THE SERIES 2005 BONDS, THE CITY OF LAUREL BONDS, THE MADISON COUNTY BONDS, THE DESOTO COUNTY BONDS AND THE MARSHALL COUNTY IDA BONDS. Termination of Forward Interest Rate Swap Agreement On December 13, 2005, the Bank, at the request of the County, entered into a SIFMA (formerly known as BMA) forward interest rate ISDA Master Agreement with Morgan Stanley Capital Services, Inc. with an effective date of September 1, 2009 (the "2005 Swap Agreement") in connection with the possible future issuance of approximately $58,000,000 of additional indebtedness of the Bank as authorized by the Bank Act and the MTC Act. Due to changes in municipal market conditions since 2005, the Bank and the County have determined that it is in their best interests to terminate the 2005 Swap Agreement in conjunction with the issuance of the Series 2009 Bonds. A portion of the proceeds of the Series 2009A Bonds will be used to provide for the payment of the termination payment (the "Termination Payment") or a portion thereof owed by the Bank as a result of the termination of the 2005 Swap Agreement. The Subsidy Payments The Bank covenants in the Loan Agreement that it will take or cause to be taken all actions required by applicable law or applicable regulations as necessary to provide for the collection to the fullest extent possible of the Subsidy Payments and will not take or cause to be taken any action or fail to take any action which in any way materially adversely affects of the ability of the Bank or MDOT to collect the Subsidy Payments to the fullest extent possible. The Subsidy Payments are not included in the Trust Estate and do not constitute security for the Series 2009 Bonds. DESCRIPTION OF THE HIGHWAY PROJECT The Highway Project will consist of constructing a portion of a North-South connector route from Interstate 10, at a point west of the present U.S. Highway 49 and Interstate 10 interchange, to U.S. Highway 90, including construction of interchanges at Interstate 10 and U.S. Highway 90, together with related improvements and infrastructure, more specifically described in the Cooperative Agreement. The current expected total cost of the Highway Project is $300,000,000. Of the proceeds of the Series 2009 Bonds, together with interest earnings thereon, approximately $57,462, will be used for the Highway Project. The Commission anticipates that the additional costs necessary to complete the Highway Project will come from (a) proceeds of additional special obligation bonds issued by the Bank and secured similarly to the Series 2009 Bonds, (b) funds appropriated by the State Legislature and/or (c) federal funds received from FHWA. To access proceeds of the Series 2009 Bonds for the Highway Project, MDOT will submit requisitions, supported by invoices, to the Trustee for payment of expenditures associated with and related to the Highway Project. See "APPENDIX I - THE COOPERATIVE AGREEMENT." A map of the location of the Highway Project is shown on the following page: 12

19 RISKS TO THE OWNERS OF THE SERIES 2009 BONDS General The Series 2009 Bonds will be payable solely from the payments to be made by the Bank under the Indenture. Pursuant to the Indenture, such payments are limited to payments due from the County under the Loan Agreement and the Series 2009 Notes, payments due from MDOT to the County under the Cooperative Agreement (which payments are also used to pay debt service on the Series 2005 Bonds) and if necessary, the Intercept Moneys, subject to the use of the Intercept Moneys to pay delinquent payments with respect to the Series 2005 Bonds and a Series of Additional Bonds, if any. Purchasers of the Series 2009 Bonds are advised of such risk factors with respect to the Series 2009 Bonds. In addition, purchasers of the Series 2009 Bonds are advised of certain additional information in connection with MDOT as set forth in "APPENDIX B - INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION" and "APPENDIX D - FINANCIAL INFORMATION RELATING TO THE STATE OF MISSISSIPPI." Such information is relevant to the ability of MDOT to make payments under the Cooperative Agreement sufficient to provide for the payment of debt service on the Series 2009 Bonds. Series 2009 Note Payments The ability of the Bank to pay principal of, redemption premium, if any, and interest on the Series 2009 Bonds depends primarily upon the receipt by the Bank of the Series 2009 Note Payments from the County which is obligated under the Loan Agreement to make such payments to the Bank, together with earnings on the amounts in the Funds and Accounts sufficient to make such payments. The ability of the County to pay principal of, redemption premium, if any, and interest on the Series 2009 Bonds depends solely upon the receipt by the County of Project Revenues from MDOT. MDOT is obligated under the Cooperative Agreement to make such payments of principal of, redemption premium, if any, interest and additional payments under the Loan Agreement to the County. MDOT is also obligated under the Cooperative Agreement to make payments of principal of, redemption premium, if any, and interest on the Series 2005 Bonds and additional payments under the Series 2005 Loan Agreement. Except for the Debt Service Reserve Fund and except for the Intercept Moneys (see "THE LOAN AGREEMENT AND THE SERIES 2009 NOTES - Agreement Withholding County Moneys to Satisfy Delinquent Payments"), there is no Fund or Account which is required to contain amounts to make up for any 13

20 deficiencies in the event of one or more defaults by the County in making such Series 2009 Note Payments, and there is no source from which the General Fund (as hereinafter defined) will be replenished except the Series 2009 Note Payments and investment income on moneys in the Funds and Accounts. While MDOT covenants to take such action as may be necessary to include all Series 2009 Note Payments and amounts due under the Cooperative Agreement in its annual budget, there can be no representation or assurance that MDOT will realize sufficient revenues to meet its financial obligations set forth in its annual budget and the Cooperative Agreement. For discussion of the annual budget of MDOT which is subject to annual appropriation by the State Legislature, see the caption "Annual Budget" under "APPENDIX B - INFORMATION RELATING TO THE MISSISSIPPI DEPARTMENT OF TRANSPORTATION". For discussion of the Cooperative Agreement, see "THE COOPERATIVE AGREEMENT," and "APPENDIX I THE COOPERATIVE AGREEMENT." For discussion of the Intercept Agreement which provides for the intercept of certain County funds to satisfy delinquent payments under the Loan Agreement, see the caption "The Intercept Agreement" under "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS" and "THE LOAN AGREEMENT AND THE SERIES 2009 NOTES Agreement Withholding County Moneys to Satisfy Delinquent Payments." Certain information relating to the State of Mississippi is contained in "APPENDIX C INFORMATION RELATING TO THE STATE OF MISSISSIPPI" and "APPENDIX D FINANCIAL INFORMATION RELATING TO THE STATE OF MISSISSIPPI." For a description of procedures for providing for the payment of Series 2009 Notes, see the caption "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2009 BONDS - Provisions for Payment of the Series 2009 Note Payments." Tax Covenants The Bank has covenanted under the Indenture to use its best efforts to comply with all actions required to assure the continuing exclusion of interest on the Series 2009A Bonds from gross income of the holders thereof for federal income tax purposes. Failure by the Bank to comply with such covenants could cause the interest on the Series 2009A Bonds to be taxable retroactive to the date of issuance of the Series 2009A Bonds. In the Loan Agreement, the County has made certain covenants regarding the preservation of the tax-exempt status of the interest on the Series 2009A Bonds. In the Cooperative Agreement, MDOT has made certain covenants regarding the preservation of the tax-exempt status of the interest on the Series 2009A Bonds. The interest on the Series 2009A Bonds could become taxable in the event that the County or MDOT fails to comply with certain of such covenants, including without limitation the covenant to rebate or cause to be rebated, if necessary, to the United States government all arbitrage earnings with respect to the Series 2009A Bonds under certain circumstances and the covenant to take all actions and to refrain from such actions as may be necessary to prevent the Series 2009A Bonds from being deemed to be "private activity bonds" under the Internal Revenue Code of 1986, as amended (the "Code"). Such an event could adversely affect the exempt status of the interest on all of the Series 2009A Bonds retroactive to the date of their issuance. Interest on the Series 2009B Bonds is included in gross income for federal tax purposes. See the caption "TAX MATTERS." Ratings There is no assurance that the ratings assigned to the Series 2009 Bonds at the time of issuance (see "RATINGS") will not be lowered or withdrawn at any time, the effect of which could adversely affect the market price for and marketability of the Series 2009 Bonds. If and when a Bondholder elects to sell a Series 2009 Bond prior to maturity, there is no assurance that a market will have been established, maintained and in existence for the purchase and sale of the Series 2009 Bonds, and there is no assurance as to the purchase price which a buyer would be willing to pay. Remedies; Litigation; Bankruptcy The remedies available to the Trustee, to the Bank or to the owners of the Series 2009 Bonds upon an "event of default" under the Indenture or under the terms of the Loan Agreement and Series 2009 Notes are in many respects dependent upon judicial actions which are often subject to discretion and delay. In the event the County or MDOT were to become a debtor under the United States Bankruptcy Code (as hereinafter defined), payments under the Loan Agreement, the Series 2009 Notes or the Cooperative Agreement may be stayed or under certain circumstances may be subject to avoidance or disgorgement and the interest of the Trustee in such payments may not extend to payments required after the commencement of such bankruptcy 14